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Sales slip 27 percent for Charles and Colvard

Moissanite-maker experiencing 'sharply reduced sales and sales prospects'

May 05, 2009

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Morrisville, N.C.--Charles and Colvard experienced a 27 percent decline in sales for the first quarter of 2009, the company announced on Tuesday.

According to a release issued by the Morrisville, N.C.-based maker of moissanite, net sales in the first quarter of 2009 totaled $2.5 million, compared with $3.4 million in the first quarter of 2008.

This decline, according to the release, "reflects the significant slowdown in the retail environment and the reduced purchases from jewelry manufacturers serving major retailers that sell moissanite jewelry."

Domestic sales were harder hit than international sales, according to the release, with U.S. sales dropping 29 percent in the first quarter, while international sales were down 21 percent.

The drop in sales is just the latest in a line of problems for Charles and Colvard, which saw sales plummet 47 percent in 2008 and faces possible delisting from the Nasdaq Stock Market Inc. if its stock doesn't rise before November.

Charles and Colvard Chief Executive Officer Richard A. Bird, who took office amid a company-wide restructuring in February, said while the company has made "significant progress" in reducing costs, including reducing spending on ineffective sales and marketing, the company still struggles in the face of the difficult retail environment.

"We are experiencing sharply reduced sales and sales prospects, particularly with some of our larger existing customers and primarily due to higher than desired inventories of moissanite jewelry at retailers, but also due to bankruptcies and financial challenges facing retailers," he said in the release. "These factors are severely constraining our sales opportunities."

According to the release, Charles and Colvard did not receive any significant orders during the first quarter of 2009 and isn't expecting to receive any in the near term.

The company, the release states, is at risk of losing customers as struggling retailers opt to discontinue the sale of moissanite jewelry.
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